GM to end foundation, redirect its charitable giving

Melissa Burden
The Detroit News

General Motors Co. is overhauling its $30-million-a year philanthropy efforts to focus on high-tech education, safety and economic sustainability, a move that has some local nonprofits and arts groups worried about funding cuts.

GM’s giving arm wants to use its dollars to more closely align with its corporate mission: to improve vehicle safety and reduce accidents and injuries; to advance education in the areas of science, technology, engineering and math; and to increase high-school graduation rates in cities. It also wants to foster and support sustainable economic development in cities around the world in which it has operations, including Detroit.

The major shift in giving for the Detroit automaker, which mirrors what many corporations are doing nationally, includes eliminating the General Motors Foundation this year.

(FILES) In this file picture taken January 14, 2014 General Motors headquarters is seen in the Renaissance Center in Detroit, Michigan. General Motors on February 4, 2015 reported a jump in quarterly earnings on strong auto sales as it boosted its dividend. GM, the largest US automaker, said net income grew 21 percent to $1.1 billion in the fourth quarter. Operating earnings improved in all four regional segments, although GM's Europe division still lost $393 million, down from a loss of $365 million a year ago. AFP PHOTO /STAN HONDA / FILESSTAN HONDA/AFP/Getty Images

GM Global Corporate Giving — with advice from senior executives — will handle the company’s giving efforts worldwide and distribute money directly from the corporation. The company says its new corporate-giving hierarchy streamlines and standardizes the process.

The nation’s largest carmaker is looking to put its philanthropic muscle toward causes that have social impact globally, instead of acting mainly as sponsor doling out small grants to U.S. organizations.

“This is a very strategic look at what makes sense for us to be involved in, where we can drive the most social change,” said Tony Cervone, GM Foundation co-chairman and head of communications for the automaker. “This is a pretty generous company. Its people are extraordinarily generous. We inherently want to be altruistic, but being altruistic doesn’t mean being effective, and being effective needs to be more important.”

That change in philosophy has left organizations in Metro Detroit’s arts and nonprofit community wondering if they will be eligible for future funding from GM, prompting some to accelerate efforts to find new sources of funding. Some say they have been given no assurances beyond a year or two.

GM acknowledges that during its transition last year, communication could have been better with local groups. Staff members have spent time over the past six months-plus working with local organizations on how to apply for funding, how GM volunteers could assist them and how they could partner. And the company says that while it can’t approve all requests for funds, some organizations have stepped up their applications.

For the most part, organizations are expected to continue to receive funding from GM, but what is funded may change. Cervone said there are no plans to reduce overall charitable contributions, which in 2015 totaled about $30 million, the last year for which data was available. GM said it expects 2016 giving to be about the same.

The company provided no specific breakdown on how much of its money goes to Detroit-area organizations. But it says it has no plans to cut back on overall funding in Detroit and said it may increase.

Some organizations had relied upon the GM Foundation funding to pay administrative expenses, and the foundation gave them notice that funding would wind down over a period of time, though GM would not identify those groups. And the foundation in the past often would give a few hundred to a few thousand dollars to relatively small groups like high-school band boosters and ski patrols, and to fundraising dinners and donations to shelters, historical societies, children’s charities and health associations across the country.

“There were thousands of places that were getting nickels and dimes, and how effective truly is that?” Cervone asked.

GM Chairman and CEO Mary Barra said in an interview with The Detroit News, “We want to make sure that as the foundation makes grants and as we work with the community, that we accelerate the progress by making sure each dollar provided is earning and contributing as much as it can. I think we’ve put in a system that is going to have a lot of accountability to say, here’s what we said we’re going to do with this money, let’s make sure it did, and all to advance Detroit more quickly.”

Barra, Cervone and Jackie Parker — a corporate and nonprofit philanthropy consultant from Atlanta who was hired by GM in late 2015 as director of GM global philanthropy and corporate giving — say GM will continue to support organizations in Metro Detroit that are focused on advancing education, aiding neighborhoods and helping attract people to live, work and visit Detroit. The company also will support certain historic and popular institutions.

“This is our home,” Barra said. “So there are certain places that we feel, to be good members of the community, that we will also support.”

Local groups await word

The News reached out to a half-dozen nonprofit organizations locally, but many were reluctant to talk about GM’s changes and thereby potentially imperil funding. Juanita Moore, president of the Charles H. Wright Museum of African American History, noted during a recent panel discussion that the museum has struggled to keep its doors open with little access to federal dollars and with funding cuts from GM, Fiat Chrysler Automobiles and the city of Detroit. She could not be reached for further comment.

GM did not provide a complete list of organizations it will continue to fund locally. But on its website and in interviews, the automaker said it will continue to support the following Detroit-area organizations: Michigan Opera Theatre; Detroit Symphony Orchestra Hall; Detroit Riverfront Conservancy; Detroit Institute of Arts; Michigan Science Center; Inforum; Forgotten Harvest; Gleaners Community Food Bank of Southeastern Michigan; Belle Isle Conservancy; Henry Ford Museum; Cody Rouge Project; Focus: HOPE; Music Hall Center for the Performing Arts Inc.; Detroit Area Pre-College Education Program; and the Empowerment Plan.

Others GM says it is supporting this year: 100 Black Men of Greater Detroit Inc.; Big Brothers Big Sisters of Metropolitan Detroit; College for Creative Studies; Detroit Branch NAACP; Detroit Economic Club; Detroit Hispanic Development Corp.; Humans First Detroit; Michigan Women’s Foundation; Southwest Solutions; United Negro College Fund; United Way for Southeastern Michigan; and Urban League of Detroit and Southeastern Michigan.

Locally, GM’s giving is focused on four outcomes: boosting literacy of third-graders; increasing high school graduation rates; growing the employable workforce; and boosting tourism, local businesses and home ownership.

It recently approved a grant to Focus: HOPE to train 60 women in information technology and provided $380,000 worth of laptop computers for the program. And for the first time, GM is providing $250,000 to the city’s Grow Detroit’s Young Talent program, which pays young people for six-week summer jobs and work-readiness training.

The company also has several longtime national partners in its focus areas. Its partners in sustainability include United Way and Habitat for Humanity. Partners for safety include MADD, Safe Kids Worldwide and the National Safety Council. Partners for science, technology, engineering and math include FIRST (For Inspiration and Recognition of Science and Technology), a nonprofit that operates youth robotics competitions, and the SAE (Society of Automotive Engineers) Foundation.

Since its 1976 inception, the GM Foundation has donated nearly $1 billion to U.S. nonprofits, education organizations and disaster relief efforts globally. Chevrolet’s decision earlier this year to drop its Woodward Dream Cruise sponsorship after six years is unrelated to changes at the GM Foundation.

Difference in the community

GM’s philanthropy shift follows similar changes by corporations such as Target Corp., Wal-Mart, IBM, Starbucks and Unilever, said Parker.

“What we’re more interested in funding is programs so that we can measure societal impact and have a deliverable back to our shareholders and the folks that are interested, investors, potential consumers, potential employees, and show them what difference General Motors is making in the community,” she said.

In January, GM announced a partnership with the nonprofit Girls Who Code, providing $250,000 to expand its programs including free after-school events. The nonprofit helps girls from under-served areas get access to computer-science education and foster interest in technology and engineering degrees. Parker said GM also recently partnered with the website, which targets youth to help drive positive social changes. GM was able to to connect with millennials about distracted driving through social media and Snapchat.

Fundraising consultant Peter Remington, founder of the Remington Group in Beverly Hills, said foundations and corporations locally and nationally have been moving toward philanthropy that’s focused on corporate-based programs and results. “Instead of doing across-the-board fundraising to just about anyone who will ask, they’re being more specific in supporting certain program areas,” he said.

Corporations and foundations have limited funding and are realizing they can’t fund everyone and everything, Remington says. So they are targeting spending to make the most impact. Nonprofits are adapting to the changes by broadening fundraising and examining what they can continue to pay for.

The FCA Foundation, for example, is giving less than it used to as the former Chrysler Foundation. The FCA Foundation, which supports efforts in youth development, education, volunteerism and members of the military and their families, provided grants of about $1.3 million last year, down from $4.98 million in 2015.

A FCA spokesman said the foundation in 2016 “refined its grant-making strategy.” The automaker said nearly three-quarters of 2016 grants were made to southeast Michigan organizations such as Boys Hope Girls Hope, M-1 Rail and FIRST Robotics.

Like GM, the Ford Motor Company Fund seeks to make donations that advance certain priorities: It focuses on supporting communities, education and safety. Since 1949 it has invested nearly $1.5 billion.

In 2016, the Ford Fund and company granted $58.9 million — nearly double GM’s giving the year before. Ford’s giving last year was up 6 percent from 2015, as it expanded in Detroit, southeast Michigan and globally.

Jim Vella, president of the Ford Fund, said the fund moved away from capital grants, dinner tables and sponsorship events around 2010 and is working with partners in areas such as improving education rates and ending poverty.

“What we want to do is not just invest dollars,” Vella said. “We want to invest in a way that actually makes a difference in people’s lives.”

GM global corporate giving

Grants: Grants from GM’s revamped philanthropic arm generally will range between $25,000 and $250,000, with a maximum of three straight years for any organization, though they can re-apply after the three years with a new proposal. Preference is given to groups aligned with GM’s corporate mission: improving vehicle safety and reduce accidents; science, technology, engineering and math education; and increasing high-school graduation rates in cities. It also wants to support sustainable economic development in cities around the world in which it has operations.

Sponsorships: GM will continue to sponsor certain charitable dinners, fundraisers and events such as community walks, but there are exceptions.


Source: General Motors Co.

GM philanthropic giving

The GM Foundation gave the following amounts to major Metro Detroit institutions in 2015, the most recent year for which federal tax filings are available. GM declined to make 2016 amounts available because it has not yet filed foundation tax returns for that year.

Focus:HOPE: $500,000

Detroit Institute of Arts: $500,000

Michigan Opera Theatre: $150,000

The Parade Company: $115,000

Forgotten Harvest: $100,200

Detroit Regional Chamber Foundation: $100,000

Detroit Riverfront Conservancy: $100,000

Detroit Economic Growth Corp.: $100,000

Detroit Symphony Orchestra Hall: $100,000

Music Hall Center for the Performing Arts Inc.: $100,000

Empowerment Plan: $100,000

Business Leaders for Michigan Foundation: $80,000

Charles H. Wright Museum of African American History: $75,000

Downtown Detroit Partnership: $75,000

Michigan Science Center: $55,000

Belle Isle Conservancy: $50,000

New Detroit: $50,000

Inforum: $50,000

Detroit Winter Blast: $35,000

Detroit Historical Society: $25,000

Motown Museum: $25,000

Urban League of Detroit and Southeastern Michigan: $20,000

Gleaners Community Food Bank of Southeastern Michigan: $10,800

Source: GM Foundation 990 tax filing